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Aegis to appeal against $7m lawsuit pay-out

LONDON - Aegis Group is to appeal against a court ruling in the US that would force it to pay $6.8m (£4.4m) to rival media-buying company Independent Media Services, after a jury found that Carat USA had breached a non-competition agreement.

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In a statement, Aegis said that there are "strong grounds for appeal based upon several erroneous rulings made by the court" against its media agency Carat.

The case was brought in April 2001 when Independent Media Services lost the $125m account for New Line Cinema, the company behind the 'Lord of the Rings' trilogy of films, to Carat. Independent Media Services claimed that Carat has used confidential information gained during merger talks held in 1999 to win the work. The pair had signed an agreement that stopped Carat from soliciting the New York-based Independent Media Service's clients.

Carat won the New Line business from Independent Media Services in February 2001 after what Aegis describes as a "blind review" to which it was invited to pitch. The company denies that the non-competition agreement it signed with Independent Media Services applied to an agency review initiated by a client.

Shares in the company rose by 7.3% or 4.5p at 65.75p this morning, as Aegis said that trading was continuing to recover. It said it expects its full-year results to be "significantly better than 2001, although pre-tax profits will be held back by a somewhat higher level of restructuring and other exceptional costs than was expected in September".

In an upbeat note, it said that there were clear improvements being seen in US broadcast media, and that Europe and Asia Pacific continued to trade in line with expectations.

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